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God Save The Euro

God Save The Euro

Former Australian Prime Minister Gough Whitlam made the famous quotation ‘Well may we say God save the Queen, because nothing will save the Governor-General.' when he was booted out of the office by the Governor-General. Governor-General is the Crown's representative to the Commonwealth.

Well may we say God save the Euro, because nothing will save the PIIGS. This renewed quotation may come true quite swiftly as there are voices asking for a smaller Euro zone. It is a sovereign crisis and not liquidity crisis which can be contained by issuing more Euro.

...[[[20111110 quote Economists: Sarkozy is causing a big stir after calling on November 8th for a two-speed Europe: a “federal” core of the 17 members of the euro zone, with a looser “confederal” outer band of the ten non-euro members.

You cannot make a single currency without economic convergence and economic integration. It's impossible. But on the contrary, one cannot plead for federalism and at the same time for the enlargement of Europe. ...... So what one we do?
Honestly, it's nice to have a vision, but there are details that are missing: we made a currency, but we kept fiscal systems and economic systems that not only were not converging, but were diverging. And not only did we make a single currency without convergence, but we tried to undo the rules of the pact. It cannot work. There will not be a single currency without greater economic integration and convergence. That is certain. And that is where we are going. Must one have the same rules for the 27? No. Absolutely not [...] In the end, clearly, there will be two European gears: one gear towards more integration in the euro zone and a gear that is more confederal in the European Union.
At first blush this is statement of the blindingly obvious. The euro zone must integrate to save itself; even the British say so. And among the ten non-euro states of the EU there are countries such as Britain and Denmark that have no intention of joining the single currency.]]]

The European Union is, in a sense, made up not of two but of multiple speeds.

But Mr Sarkozy’s comments are more worrying because, one suspects, he wants to create an exclusivist, protectionist euro zone that seeks to detach itself from the rest of the European Union. Elsewhere in the debate in Strasbourg, for instance, Mr Sarkozy seems to suggest that Europe’s troubles—debt and high unemployment—are all the fault of social, environmental and monetary “dumping” by developing countries that pursue “aggressive” trade policies.